4
SUNDAY, APRIL 3, 2016 |
Sponsored Newspapers In Education Content
ON THE ROAD TO BEING ON YOUR OWN
CREDIT 101
USE CREDIT WISELY
Pay More than the Minimum
Faster payoff
Let’s say you owe $1,000 at 12.9 percent interest. If you pay the minimum due each month ($25),
it’ll take almost four times as long to pay off the balance than it would if you paid $50 a month.
Pay less interest
Paying more than the minimum also significantly decreases the total amount of interest you pay over time.
CREDIT 411:
A good rule of
thumb is to use
no more than
30 percent of
the total credit
available to you.
Make payments on time
As long as you make on-time payments, keep
your balance low in relation to your credit limit and
spend within your budget, you’ll build excellent
credit and avoid the pitfalls of debt. One helpful
tip to paying on time: set alerts on your phone to
remind you when payments are due.
Set spending alerts
Just because you have access to credit, doesn’t
mean you should use it all. A good rule of thumb
is to use no more than 30 percent of the total credit
available to you. Set spending alerts and limits
on your card account. That way, you’ll receive an
alert when nearing your personal spending limit.
Note: your personal limit differs from your card’s
spending threshold.
$450.00
$400.00
$350.00
$300.00
$250.00
$200.00
$150.00
$50.00
$0.00
Minimum
Payment
($25/month)
$50/month
Total Interest Paid
70
70
60
50
40
30
20
10
80
Minimum
Payment
($25/month)
$50/month
Time of Payoff (months)
